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INCOME TAXES
 12 Months Ended
Oct. 03, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES:
The components of (Loss) Income Before Income Taxes by source of income are as follows (in thousands):
Fiscal Year Ended
October 3, 2025September 27, 2024September 29, 2023
United States$(51,995)$24,683 $254,027 
Non-United States7,689 7,347 15,703 
$(44,306)$32,030 $269,730 
The (Benefit) Provision for Income Taxes consists of (in thousands):
Fiscal Year Ended
October 3, 2025September 27, 2024September 29, 2023
Current:
Federal$5,213 $22,949 $29,704 
State and local(369)3,283 10,126 
Foreign4,471 4,404 2,372 
9,315 30,636 42,202 
Deferred:
Federal(14,310)(14,899)10,350 
State and local(139)(3,019)2,860 
Foreign1,051 (1,658)1,160 
(13,398)(19,576)14,370 
$(4,083)$11,060 $56,572 
The (Benefit) Provision for Income Taxes varies from the amount determined by applying the United States Federal statutory rate to Income Before Income Taxes as a result of the following (all percentages are as a percentage of (Loss) Income Before Income Taxes):
Fiscal Year Ended
October 3, 2025September 27, 2024September 29, 2023
United States statutory income tax rate21.0 %21.0 %21.0 %
Increase (decrease) in taxes, resulting from:
State income taxes, net of Federal tax benefit2.1 5.0 3.8 
Foreign taxes(1.8)2.6 (0.1)
Separation related adjustments(5.8)(2.9)— 
Permanent book/tax differences(5.0)3.8 0.3 
Nontaxable gain on foreign subsidiary disposition— — (4.0)
Uncertain tax positions(0.1)0.7 0.5 
Deferred tax on foreign investments— 4.3 — 
Share-based compensation(3.8)3.5 — 
Tax credits & other2.6 (3.5)(0.5)
Effective income tax rate9.2 %34.5 %21.0 %
As of October 3, 2025 and September 27, 2024, the components of Deferred Income Taxes are as follows (in thousands):
October 3, 2025September 27, 2024
Deferred tax assets:
Accruals and allowances25,351 22,777 
Employee compensation13,478 18,485 
Operating lease right-of-use liability23,316 19,924 
Business interest expense carryforward34,591 16,795 
Research and development expenses9,876 5,622 
NOL/credit carryforward and other8,185 7,290 
Deferred tax asset 114,797 90,893 
Valuation allowances$(4,662)$(4,662)
Deferred tax asset (net of valuation allowance)110,135 86,231 
Deferred tax liabilities:
Property and equipment65,201 59,461 
Other intangible assets including goodwill90,417 83,247 
Rental merchandise in service82,500 78,542 
Operating lease asset18,767 16,746 
Capitalized contract costs19,061 24,541 
Internally developed software8,072 7,846 
Other$1,691 $5,752 
Deferred tax liability285,709 276,135 
Net deferred tax liability$175,574 $189,904 

Deferred tax assets of $1.8 million and $1.6 million as of October 3, 2025 and September 27, 2024, respectively, are included in "Other Assets" on the Consolidated Balance Sheets. Deferred tax liabilities of $177.3 million and $191.5 million as of October 3, 2025 and September 27, 2024, respectively, are included in "Deferred Income Taxes" on the Consolidated Balance Sheets.
As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact the need for valuation allowances against deferred tax assets. As of October 3, 2025, the Company has $4.7 million of United States foreign tax credit carryforwards from periods prior to the Separation. However, the Company maintains a full valuation allowance against these credit carryforwards. The Company assessed the remaining deferred tax assets and believes it is more-likely-than-not that they are realizable.

As of October 3, 2025, the Company had $2.7 million of tax-effected state net operating loss carryforwards. The earliest expiration of the state net operating loss carryforwards is fiscal 2029 and the Company believes all carryforwards will be utilized prior to expiration.

A reconciliation of the beginning and ending amount of valuation allowances follows (in thousands):

October 3, 2025September 27, 2024September 29, 2023
Balance, beginning of year$4,662 $— $— 
Separation related adjustments— 4,662 — 
Balance, end of year$4,662 $4,662 $— 

Under the Tax Matters Agreement, the Company is responsible for income taxes on prior period returns filed on a separate company basis in state, local, and foreign jurisdictions. Prior to the Separation, the Company was included on Aramark’s United States federal and various state consolidated and combined tax returns that remain the responsibility of Aramark. Adjustments to Aramark’s consolidated and combined federal and state tax returns could affect the tax attributes allocated to the Company under the Tax Matters Agreement. While it is often difficult to predict the timing or resolution of a particular tax matter, the Company does not anticipate any adjustments resulting from United States federal, state or foreign tax audits that would result in a material change to its financial condition or results of operations. Currently, none of the Company’s income tax returns are under examination by a taxing authority. With few exceptions, the Company is no longer subject to foreign or state and local tax examinations by tax authorities for fiscal years before 2021.

Undistributed earnings and profits ("E&P") of our foreign subsidiaries amounted to $33.5 million as of October 3, 2025. Currently, $33.5 million of the undistributed E&P of our foreign subsidiaries is considered to be indefinitely reinvested and, accordingly, no deferred income taxes have been provided thereon. Upon distribution of those earnings to the U.S. in the form of dividends or otherwise, the Company could be subject to U.S. state and local taxes and withholding taxes payable in various jurisdictions, which may be partially offset by a U.S. foreign tax credit. The unrecorded withholding tax on undistributed E&P is not significant to the Consolidated and Combined Financial Statements.

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate, was approximately $0.4 million, $0.4 million, and $4.4 million as of October 3, 2025, September 27, 2024 and September 29, 2023, respectively. In connection with the Separation, our unrecognized benefits with respect to our uncertain tax positions decreased by $4.2 million during fiscal 2024 as these remained the obligation of Aramark under the Tax Matters Agreement.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits follows (in thousands):
October 3, 2025September 27, 2024September 29, 2023
Balance, beginning of year$412 $4,392 $2,963 
Additions based on tax positions taken in the current year73 195 554 
Additions (Subtractions) for tax positions taken in prior years(51)— 875 
Separation related adjustments— (4,175)— 
Balance, end of year$434 $412 $4,392 

The Company has $0.1 million and $0.1 million accrued for interest and penalties as of October 3, 2025 and September 27, 2024, respectively, in the Consolidated Balance Sheets. Interest and penalties related to unrecognized tax benefits are recorded in "(Benefit) Provision for Income Taxes" on the Consolidated and Combined Statements of Income. It is reasonably possible that the amount of unrecognized benefits with respect to certain of our unrecognized tax positions
will change within the next 12 months. At this time, the Company does not anticipate the amount of gross unrecognized tax positions to decrease within the next 12 months.

During fiscal 2025, fiscal 2024 and fiscal 2023, the Company paid cash for income taxes, net of refunds received, of $26.5 million, $19.1 million, and $0.2 million, respectively.
On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (“Act”), a comprehensive legislative package that includes significant changes to federal tax policy. The Act, among other corporate provisions, includes the permanent extension of 100% bonus depreciation and the repeal of mandatory capitalization of domestic research and experimental expenditures. The new law has a range of effective dates, with certain changes taking effect in fiscal year 2025 and others that become effective in future periods. For the provisions effective for the fiscal year ended October 3, 2025, the Company included the beneficial impacts of the Act.